The maximum loss limit is the amount below which your capital or balance cannot fall. This rule is set as a percentage of each model based on the initial account size. For example, if you have an account of USD 100,000 with a two-step model and the maximum loss limit is 10%, your capital or balance cannot drop below USD 90,000 at any point.

Example:

You have chosen an account of USD 100,000. The maximum loss limit is 10% of the initial balance, which in this example is USD 100,000, a two-step model:

Maximum loss = USD 100,000 * 10% = Maximum loss limit USD 10,000.

This means your capital/balance cannot fall below USD 100,000 – 10,000. Maximum loss limit = USD 90,000.

If at any specific point your capital/balance drops below USD 90,000, your account will be closed.